SYDNEY (WiMAX Day). The Australian government announced on Monday that it would award US$800 million to OPEL, a joint venture between telecom operators Optus and Elders, to build a WiMAX network that extends broadband connectivity to the rural areas of Australia.

OPEL, which has no experience building or operating a WiMAX network, was chosen over competing bids from Telstra, the incumbent telecom, and the AUSAlliance, comprised of Austar and Unwired, who own and operate some 200 Mhz of WiMAX spectrum covering the extent of Australia.

The objective of the Australian government is to provide broadband access to 99% of Australia’s 20.8 million inhabitants, 3.1 million of which live in rural areas, which the government defines as small towns or settlements with a population of less than 1,000.

The land mass of Australia covers some 7.7 million km², and half of it is desert. Australia is larger than Europe, but has a population 30 times smaller. The United Kingdom has some 244 inhabitants per km², compared to 2.5 persons per km² in Australia.

Grand scale Myopia
Following the government announcement, OPEL admitted that in fact it would use a combination of WiMAX and ADSL technologies to build the network. The joint venture also will invest some US$775 million of its own money in the project.

However, the plan set forth by OPEL will not use standardised WiMAX, which relies on licensed radio spectrum in low frequency bands. The OPEL plan calls for the use of unlicensed spectrum in high frequency bands (5.8 GHz and 28 GHz).

With radio spectrum, the ability to broadcast signals over great distances decreases as the frequency band increases. GSM operates at low frequencies between 800 and 1800 Mhz. Mobile WiMAX operates from 2300 to 2600 Mhz, both of which allow transmission of signals over great distances, and require fewer base stations to effect such transmission. Frequencies in the upper range require far more (costly) base stations to cover the same area.

The choice of radio spectrum in this plan has been criticised by many in Australia as grossly inefficient because the cost is more than double of what could be achieved using lower frequencies.

Moreover, ADSL technology requires an existing network of copper telephone lines, which is convenient for cities that have an installation. However there is no such network in rural Australia. The time and cost of laying thousands of miles of copper wire that connect to far-reaching areas is a technological step backwards.

No country in the 21st century would consider investing in copper wire technology for rural access, however the Australian government seems to have been duped into believing it is cost effective.

The $3 billion nationwide WiMAX network that Sprint is building in America will cost roughly $30 per each of the 100 million population covered. By comparison, the Australian plan at $1.57 billion will cost roughly $78 per each of the 20 million population covered. That’s nearly three times more expensive than Sprint’s “state-of-the-art” network.

While the ambitions of the Australian government are noble, its plan is so radically uneconomical that it is almost reprehensible. This gross misuse of taxpayer funds will result in a network that is obsolete before being built, suitable only for distracting kangeroos and dingoes as they hamper across the wild Australian outback.